Reinsurance broker Guy Carpenter’s latest Global Property Catastrophe Rate on Line (ROL) Index has fallen 6.6% at the January 1st, 2025, reinsurance renewals, which reflects the reported rate decreases seen across global property cat treaties.
Guy Carpenter updates its Global and Regional Property Cat ROL Indices at key renewal dates, and each index reflects the pricing impact of an expanding or contracting exposure base, changes in buying habits and how risk is measured, and also changes in market conditions.
The broker explains that each index is a measure of the change in the amount paid for coverage year-on-year and on a consistent program base.
Starting with the Global Property Cat ROL Index, and the decline of 6.6% at the 1.1 2025 renewals is the first decrease since the soft market in 2017, and some change from the 29.3% seen for full-year 2023, and the 2.3% for full-year 2024.
The decrease at the January 1 2025 renewals comes as property catastrophe rates have fallen across the globe, with Guy Carpenter reporting previously that non-loss-impacted property cat renewals saw notable risk-adjusted reinsurance rate reductions of 5% to 15%.
However, pricing outcomes did vary by region, attachment point, and reinsurer views of price adequacy, and loss-impacted layers saw risk-adjusted rates from flat to 30% increases in regions such as the U.S., Europe, and Canada, said the broker.
The Guy Carpenter U.S. Property Cat ROL Index has fallen 6.2% at the 1.1 2025 renewals, down from the 1.2% full-year 2024 gain and the huge 35% gain seen at full-year 2023. Again, it’s the first year-on-year decrease since 2017, but it’s worth noting that the index is still higher than any level achieved prior to 2023, which you can see below.
Dean Klisura, President & CEO of Guy Carpenter, said previously, “Renewal outcomes at year-end reflect reinsurers’ positive property experience over the last two years and casualty portfolios that are well-positioned for future profitability.”
Turning to the Guy Carpenter Regional Property Cat ROL Index, year-on-year, Europe decreased 5.3% and APAC 7.2%. Again, property cat reinsurance rates in both regions are still elevated compared to the most recent soft market years.
Although all of the Guy Carpenter property cat ROL indices saw decreases at the January 1st, 2025, reinsurance renewals, it’s important to remember that rates-on-line are still at historically high levels, suggesting 2025 could be another robust year for reinsurer profits, dependent on loss activity.
